Motion challenges city's hotel deal

Friday

Feb 28, 2014 at 9:25 AM

Motion challenge's sales price of land

By Julian MarchJulian.March@StarNewsOnline.com

An attorney has filed a legal motion challenging the city of Wilmington's recent convention center hotel deal. Raleigh attorney E.D. Gaskins Jr. filed the motion Friday in New Hanover County Superior Court on behalf of a Glenn Wells, who is listed in the motion as a taxpayer. The motion challenges the city's Feb. 4 approval of a hotel deal to sell riverfront land to Harmony Hospitality of Virginia. Harmony plans to develop a $33.6 million Embassy Suites on the riverfront next to the city's convention center. The challenge alleges the agreement between the city and Harmony violates a 2006 court ruling. The city, in turn, says it has followed the ruling. The consent judgment, issued by Superior Court Judge Paul Jones in August 2006, ended a nearly yearlong legal battle over the center. The settlement listed multiple requirements, including a stipulation that the center and attached hotel be operated by separate companies. One requirement says no public funds can be used to subsidize the convention center hotel.On Feb. 4, the council voted to sell less than 1 acre of riverfront land to Harmony for $578,820. The land is sandwiched between the convention center, the Cape Fear River and the Wilmington Chamber of Commerce.The latest motion challenges the sale price of the land as being "substantially less than the fair market value of the property." The fair market value is $1.32 million, according to the motion, which goes on to say that more than $740,000 of public funds "are apparently being used to underwrite or subsidize the hotel." That $1.32 million figure was also used in a September 2013 appraisal of the proposed hotel site prepared for the city by Ingram and Company Inc. of Wilmington. The $578,820 purchase price was based on a 2007 appraisal and was also the figure used back in 2011 when the city started seeking developers for the project, according to the city.The city's price of the land has also been criticized by Wilmington attorney Matthew Davis, who represents Sotherly Hotels Inc., the owner of the Hilton Wilmington Riverside.Davis, who started raising concerns about the hotel deal last year, spoke before the city council the night it approved the deal. "I believe that these proposed agreements are leading the city headlong into trouble," Davis said before the vote.On Friday, the city released the following statement: "We are very disappointed to learn about this motion, especially since there has been such overwhelming public support from citizens across our community who want to see this important economic development project completed. The city believes very strongly that we are in full compliance with all state laws and the 2006 consent decree and we are confident that the court will rule in our favor."The motion asks a judge to hold a hearing to determine if there is probable cause that the 2006 order may have been violated, Gaskins said. If so, the motion requests 60 days so attorneys can study the issue before presenting the case before a judge. On Friday morning, Mayor Bill Saffo said he hoped the legal challenge would not delay the start of the convention center hotel. He said the developers will continue to move forward. The hotel deal was mired in delays. Throughout the negotiation process, Harmony Hospitality asked the city for extra time as it sought to get financing in order. Convention center officials have long said an attached hotel is paramount to the success of the center as it attempts to draw events and conventions. The city has been trying to attract a full-service, upscale hotel to the site since 2007. The convention center opened in 2010.